[2022 National Audit] Opposition Claims "Special Privileges in Official Residence Construction" at Budget Committee Hearing... Ruling Party Faces 'Lee Risk'

Conflict Over 'Tax Reform' Including Corporate Tax Cuts

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho responds to lawmakers' questions during the comprehensive audit of the Planning and Finance Committee held at the National Assembly on the 21st. (Photo by Yonhap News)

[Asia Economy Reporter Moon Chae-seok] At the comprehensive audit of the National Assembly's Planning and Finance Committee held on the 21st targeting the Ministry of Economy and Finance and others, the budget for relocating the Presidential Office to Yongsan and the construction of the presidential residence once again came under scrutiny.

The main opposition party, the Democratic Party of Korea, criticized the budget for relocating the Presidential Office as a "waste of taxpayers' money" while simultaneously attacking the ongoing allegations of preferential treatment in the construction of the Hannam-dong presidential residence. The ruling party, the People Power Party, counterattacked by digging into the recently intensified controversy surrounding Democratic Party leader Lee Jae-myung's "judicial risk."

The Democratic Party opened fire. During the morning questioning, Democratic Party lawmaker Han Byung-do said, "Recently, the Ministry of Economy and Finance corrected and announced that an additional 2.1 billion KRW is required for the presidential residence construction related to the Presidential Office," and asked, "Is the 7.2 billion KRW spent on relocating the security unit unrelated to the Presidential Office relocation? It seems to be missing from the estimates."

In response, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho said, "That budget was calculated as the direct cost related to the relocation," adding, "I need to look at the list (of additional items)."

Democratic Party lawmaker Jin Sun-mi raised suspicions of "preferential contract awards," stating that the company responsible for the design and supervision of the Hannam-dong presidential residence interior had no prior procurement record and only registered its bidding qualification shortly before the contract.

Jin criticized, "This is outrageous," and said, "The government always talks about fairness and freedom, but it seems like a freedom to just put in someone you know and create a multi-billion KRW construction project."

In response, Procurement Service Commissioner Lee Jong-wook explained, "The presidential residence construction has some special characteristics," adding, "There are only a few presidential residences, so public procurement companies do not have much experience, achievements, or contract cases."

In response to the opposition's relentless offensive, the People Power Party counterattacked with allegations related to Democratic Party leader Lee Jae-myung.

People Power Party lawmaker Kim Sang-hoon mentioned during the afternoon questioning, "Recently, various controversies have been emerging involving the Asia-Pacific Peace Exchange Association (APPEA), Ssangbangwool, Lee Hwa-young, and Democratic Party leader Lee Jae-myung," referring to the 'Ssangbangwool Group case' related to bribery charges against former Gyeonggi Province Deputy Governor Lee Hwa-young and the APPEA's alleged remittance to North Korea.

Lee Hwa-young served as the Deputy Governor for Peace in Gyeonggi Province during Lee Jae-myung's tenure as governor. Lee Hwa-young is currently under indictment and in custody on charges of receiving bribes worth several hundred million KRW from the Ssangbangwool Group in exchange for supporting inter-Korean economic cooperation projects.

Customs Service Commissioner Yoon Tae-sik said in response to questions about the APPEA's alleged remittance to North Korea, "Regarding payment, we are keeping open various possibilities, including the fact that funds may have been sent to North Korea, and we plan to conduct a thorough investigation."

The ruling and opposition parties also clashed over the government's tax reform direction, which focuses on corporate and income tax reductions.

People Power Party whip Ryu Seong-gil defended the government, saying, "Since corporate tax ultimately falls on individuals, lowering the top corporate tax rate is not a tax cut for the rich. Other countries are lowering their top corporate tax rates."

On the other hand, Democratic Party lawmaker Ko Yong-jin criticized the government's tax cut policy, stating, "The reason why income tax, corporate tax, and comprehensive real estate tax all have a progressive tax system is to have large corporations and the wealthy, who have greater ability to pay, bear more taxes to integrate society and resolve polarization." A contentious issue during the audit was the government's plan to advance the exemption of interest and capital gains tax on foreign national bond investments from the 17th.

Before the audit began, Deputy Prime Minister Choo explained the rationale for the early implementation through an enforcement decree, saying, "To respond to recent financial market instability and to attract foreign investment funds, we intend to temporarily apply a zero tax rate on interest and capital gains from national bonds until the end of this year."

Opposition lawmakers criticized this, calling it a "violation of legislative authority" (Jin Sun-mi) and "rule by enforcement decree" (Shin Dong-geun).

In contrast, Kim Sang-hoon argued, "The pinnacle of violating the National Assembly's legislative authority was actually during the previous administration, when the minimum wage enforcement decree was pushed through or when three laws with uncertain passage in the National Assembly were forced through by revising enforcement decrees."

This content was produced with the assistance of AI translation services.